Spatial price analysis of the fish markets in Istanbul and the impact of the Turkish wholesale market reform

Seafood markets are increasingly becoming global as more and more countries and species are sharing a common price determination processes. This study examines spatial market integration in Istanbul fish market and import prices to Türkiye employing non-linear autoregressive distributed lag (NARDL) model and the frequency-domain Granger causality test. The sample period covers a significant regulatory reform designed to enhance the functioning of Turkish wholesale food markets, streamline the supply chain between producers and consumers, and lower prices at the retail level. Using the model, estimations are conducted for the full sample and post-reform periods to understand the impact of the reform on market integration. The estimation results show there is no long-run asymmetry in either the full sample or the post-law period, but short-run asymmetry is present in the market. In this sense, the amendment to the wholesale market law does not lead to any change in price asymmetry. In addition, vertical market integration is established between the domestic and imported fish prices. After the reform, the statistically significant and relatively higher price elasticities compared to the full sample period indicate stronger market integration, suggesting that the law has, at least to some extent, enhanced market efficiency.